Fiala government staying the course on reforms despite strike alert

Josef Středula

The Czech government, which recently unveiled a far-reaching austerity package aimed at curbing the growing state deficit, has said it will not submit to trade union pressure to water-down the proposal. Responding to a strike alert called by the unions on Monday, Prime Minister Petr Fiala said the planned reforms would remain on track.

The country’s umbrella trade union organization voiced the strongest protest yet to the government’s austerity package on Monday, arguing that it will place an excessively heavy burden on the weakest social groups, among them pensioners, families with children and employees. The unions’ head Josef Středula announced a strike alert even before he sat down to the negotiating table with government officials and employers.

“This is not a dialogue. This is a dictate… It concerns every one of us. And I can assure you that our protest will not end with a strike alert. We will review the situation day by day, hour by hour, with the aim to alleviate the impact of these measures on employees and their families.”

The four hours of tripartite talks that followed failed to diffuse the tension and coming out of the meeting Prime Minister Petr Fiala slammed the trade unions’ stand as “irresponsible”.

Petr Fiala | Photo: Ondřej Deml,  ČTK

“We are happy to engage in a dialogue and we expected criticism, but dialogue does not include coercive actions such as we are seeing here…. I am sure that everyone is well aware of the state of our public finances, that the situation is getting out of control and that something must be done to reverse this trend.”

Although employers’ representatives and the Czech Chamber of Commerce expressed appreciation of the fact that the government was taking action to lower the state deficit, they too expressed reservations regarding the fact that they had not been consulted about the planned measures in advance. They asked for further talks regarding some of the measures that will concern local businesses – such as the plan to scrap all non-investment subsidies.

The prime minister said that minor alterations to the package were possible if they did not affect the overall volume of the planned cuts –approximately 94 billion crowns.

“If there is any subsidy the significance of which was overlooked then we could talk about renewing those funds to the given project and saving them elsewhere.”

Photo: Barbora Němcová,  Radio Prague International

Facing criticism from many sides and calls for selected parts of the package to be reviewed, Mr. Fiala said it had taken the five ruling parties months to reach agreement on the mainstays of this reform plan. He said that while he was open to dialogue with regard to minor alterations, he would not allow it to be eroded by radical changes.

The austerity package, which aims to save 94 billion crowns in 2023, will mean higher taxes for companies and individuals, layoffs or reduced salaries in the public sector, an end to all non-investment subsidies, the scrapping of work benefits and higher sickness insurance for employees, a slower growth in pensions and VAT alterations which will further increase the prices of goods and services.

The five party ruling coalition has said the proposal presented was the best possible compromise that could be achieved under the circumstances. With a majority in both houses of Parliament the government is in a position to push it through in time for it to take effect at the start of next year.